Premier Dan Andrews seeks bailout from federal budget as Victorian debt soars to $115billion

Prime Minister Daniel Andrews seeks a massive bailout from Anthony Albanese as Victoria’s national debt soars amid the fallout from the world’s longest Covid lockdown.

Victoria’s debt stands at $115 billion and is expected to rise to about $165 billion by 2025-2026 if the state doesn’t get a huge handout in the upcoming federal budget to be handed over by Treasurer Jim Chalmers on May 9.

The dire state of Victoria’s finances is compounded by the interest on her debt, which is expected to rise to $7.32 billion within three years.

If the state does not get a very large cash injection from the federal government, thousands of jobs and services in Victoria’s public sector could suffer.

“We will always lobby, push, pressure and advocate and present a good quality case to the Commonwealth government for more and more support,” Mr Andrews told the Financial Overview.

He said Victoria had been ‘fundamentally ripped off by the Liberal National Party (federal government)’ for nearly a decade.

This view has long been echoed by Victoria’s Treasurer Tim Pallas, who said that under the former government of Scott Morrison, the state “got less than six per cent of new (infrastructure) funding, despite having 26 per cent of the country’s population ‘.

Mr Pallas said Victoria could lose $1bn a year under a ‘distorted’ GST distribution decided upon by Mr Morrison.

Mr Andrews said Victoria’s budget, due to be handed over on May 23, will be very difficult, with tough choices to be made.

He said the tens of billions of dollars spent on health and safety measures during the pandemic must now be paid back.

But there are also serious ongoing pressures on public finances from wage demands from public sector unions, the slowing real estate market and unexpected cost increases for infrastructure projects.

Talks are reportedly set to take place between the Victorian government and the Commonwealth government amid fears that austerity measures in Victoria could have a knock-on effect on the national economy.

Speaking on Channel 9’s Today show on Tuesday morning, federal treasurer Jim Chalmers acknowledged that “state budgets across the country are under strain, as is the Commonwealth budget.”

He said the national government was talking to all state and territory governments about funding.

When it was put to him that Victoria ‘has bad credit’, Mr Chalmers did not disagree.

‘(Mr Andrews’) budget is under pressure. There’s no doubt about that. But so is mine. So are a number of other state colleagues, so we try to work with people rather than against them,” he said.

“We have a lot of agreements over the course of the next year or so. We will work with the Victorians and others to land them.’

Victoria’s national debt is $115 billion and is expected to rise to about $165 billion by 2025-26 if the state doesn’t get a huge handout in the federal budget from Anthony Albanese (pictured with his partner Jodie Haydon) May 9

What Victoria’s state budget looks like next month will largely depend on how much extra money it gets from the federal budget two weeks early.

International rating agencies – which have a huge influence on the terms a state gets when seeking a loan – will keep a close eye on Victoria’s budget.

It already has the lowest rating of the Australian states after a double downgrade in December 2020 during the Covid-19 pandemic.

Daily Mail Australia has contacted Mr Andrews for comment on this story.